Bring ‘economic love’ to the holiday table

How to talk to your family about finances

JenniferOpenshaw

As you gather with family over the coming days, maybe it’s time to think about a special love between individuals, between family members, and between loved ones. I call it “economic love.”

“Economic” because it is about doing the right things financially to create and sustain financial independence. “Love” because it’s about helping others in your family to achieve this independence so that they can pursue health and happiness in their daily lives.

So I say the holiday — or any other time you’re together — is a good time to bring some economic love to the table.

Okay, so how?

Time together is precious, and is an opportunity to discuss a lot of things. How the kids and grandkids are doing in school, how the new job is going, the latest home improvement or spring gardening project.

These are all great topics; such communication is vital to the coexistence of a close-knit family unit — and friends as well. But if the communication lines are open, why not ask a few financial questions? Why not do a little financial checkup on your loved ones? Your aging parents, other relatives or close friends?

One of your friends or family members might have experienced a job loss, or they may be among those who simply, out of fear or inertia, put off making important decisions. The key is empathy, and that means asking questions and offering advice to help them. Don’t just be nosy.

Like most conversations about sensitive topics, it’s best to say a few things to let your partner know you care and what you’re concerned about, and then let them do the talking. To ask loaded questions that might make someone uncomfortable will not get you where you want to go.

Talk to them about what might really concern them — like debt for actively working couples or keeping up with bills to an elder. Be clear that you’re concerned about them. If it makes sense, use yourself as an example.

Here are some strategies:

The recent graduate with a new job

This might be your niece or nephew who doesn’t know what a 401(k) is and could miss out on valuable tax benefits and company matching.

Ask them whether or not they’ve signed up for a 401(k) or equivalent employer plan. Encourage him or her to not only sign up for their 401(k), but to sock away as much as possible.

Extra credit: Give some examples of the “power of compounding.” Remind them that they have the power of time on their side if they start now: a 25-year old only has to save about $700 a month to become a millionaire by 60 compared with a 45-year-old who, even if saving $1,000 per month, only gets to about $300,000 by the same age, assuming 6% average annual returns.

The new parent

Perhaps this is a cousin or sibling who just had a baby. Have they started a college savings account? It’s a great way to begin saving on a regular, automatic basis and enjoy tax benefits, too. .

Like the 401(k) example, starting early is much more effective. Remind them that they can get the grandparents or other relatives to chip-in over the years. So-called “529” college planning tools can be good estate-planning tools, especially for grandparents and other relatives of substantial means.

Extra credit: If you’re in a position to do so, offer a matching contribution for a period of time. That will get them started and give you the best kind of “economic love” credentials — a willingness to sacrifice to help their cause.

The elder couple

Aging parents or other family elders are used to answering questions about their physical health, but less common are inquiries about economic health. Ask how things are going with respect not just to investments and wealth, but handling daily transactions and paying bills.

If, God forbid, something were to happen, does Mom (or Aunt Jane) know what to do? Does she know where financial documents and contacts exist? Have they had conversations about care that might be needed?

Any one of these could trigger the need for a conversation with a financial advisor or with their adult children to ensure that financial decision-making isn’t left undone, placing an additional hardship should a spouse pass before the other.

Extra credit, again: Don’t just ask the questions — show your economic love by offering to help — to catalog assets, pay bills, and so forth.

These may sound like tough topics. But they don’t have to be. It’s all in how you do it.

The main idea is to enter the holiday weekend or any other gathering with the spirit of care and love.

Mortgage Rates

Powered by

This advertisement is provided by Bankrate, which compiles rate data from more than 4,800 financial institutions. Bankrate is paid by financial institutions whenever users click on display advertisements or on rate table listings enhanced with features like logos, navigation links, and toll free numbers. Dow Jones receives a share of these revenues when users click on a paid placement.

Intraday Data provided by SIX Financial Information and subject to terms of use.
Historical and current end-of-day data provided by SIX Financial Information.
All quotes are in local exchange time. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only.
Intraday data delayed at least 15 minutes or per exchange requirements.